What's Coming For Apple Earnings? Here's What Andy Hargreaves Thinks

Top research analysts like Pacific Crest Securities Andy Hargreaves released their earnings preview for Apple Inc.

on Thursday. Here is what Hargreaves had to say. Pacific Crest Securities recommended an Overweight position in Apple with a PT of $96.30. Looking at FQ1 earnings, Hargreaves sees a "favorable" long-term risk/reward. "We believe Street expectations for F2016 iPhone units have been appropriately reset and see the potential for significant iPhone unit growth in the iPhone 7 cycle," the analyst commented. Hargreaves broke the points which he focused on into 3 key parts: FQ2 (March) revenue guidance Our expectation: $49 billion to $52 billion Our estimate: $51.8 billion Consensus: $56.0 billion FQ1 iPhone units Our expectation: 72.7 million Street estimate: 76.0 million iPhone would continue to grow FQ2 gross margin guidance: Our expectation: 39.0 percent to 40.0 percent Our estimate: 39.8 percent Consensus: 40.1 percent Hargreaves also noted that he expects FQ2 to provide a clean read on run-rate iPhone unit volume for the cycle, and that it will not be affected by early cycle demand. "We believe buy-side consensus for FQ2 iPhone units is 45 million to 50 million, well below the sell-side consensus of 55 million," he commented. Also significant, there was concern about near-term iPhone units appearing to be priced in at current levels. "If gross margins are holding, longer-term investors can feel confident in continuing to own AAPL. Conversely, if gross margins are pressured, it could undermine longer-term expectations for profit stability," Hargreaves noted.